Details

Case

Educator Copy

Cool Breeze Airconditioners

Ayesha Naweed


INDUSTRY : Electronics

AREA : Finance

ORGANIZATION : Cool Breeze Airconditioners

LENGTH : 5

LUMS No : 02-609-98-1

PUBLICATION YEAR : 1998

DESCRIPTION

KEYWORDS:

Cool Breeze Airconditioners,Electronics,Finance


DESCRIPTION:

Ali Ahmed was reviewing the first-quarter performance of Cool Breeze Air conditioners in early April 1995. He was keenly aware of the fact that he had very little time left before the pressure of the peak season hit him and he was forced to seek alternative financing. His company had done extremely well since it was established, with sales and profits growing at an impressive rate. However, the company had now reached a stage where the initial level of working capital could no longer support its ongoing operations. The original line of credit of Rs 30 million, maintained with Asia Commercial Bank, was completely exhausted. During the previous year’s peak season, Ali had had a lot of problems in meeting his working capital requirements. To bridge the shortfall, he had relied heavily on suppliers’ credit. This year, the sales prospects seemed even brighter than last year and it was evident that the resources were going to be insufficient. If his company was to achieve the projected sales levels, Ali would have to arrange an additional credit line.


LEARNING OBJECTIVES:

N/A


SUBJECTS COVERED:

Finance